"I don't really think that the thing is to take a previous generation of technology and port them directly," he said. I agree with that. We have to think about new tools to be our future web apps. Just porting office apps to the web won't work.

So what's this deal about now? Google seems to want a wider distribution of their toolbar. According to the Cnet coverage (via John Battelle again):

"Details about what exactly that will entail were vague at best, with the only nugget offered being that Sun, in the immediate future, will make Google's toolbar a standard part of the package when users download Sun's Java Runtime Environment from the server seller's Web site."

Sergey Brin further stated that distributed thin web applications allowed you to do "new and better things than the Office package and more." So further tools by Google can be expected.